Chapter 18: Workers

Question 1

Wage factors

Answer 1

• Wages
• Overtime pay
• Bonuses
• Commisions

Question 2

Non-wage factors

Answer 2

• Job satisfaction
• Type of work
• Working conditions
• Holidays
• Pensions
• Fringe benefits
• Job securite
• Career prospects
• Size of firms
• Location

Question 3

Limiting factors

Answer 3

• Qualifications they have
• Skills they possess
• Experience they have
• Location of house
• The more mobile people, the wider the choice of occupation is available to them

Question 4

Wage determinants

Answer 4

• Demand and supply of labour
• Relatiuve bargaining power
• Government policies
• Public opinion
• Discrimination

Question 5

National minimum wage

Answer 5

• Set above market equilibrium wage rate
• Paying higher wages to workers could raise motiviation and hence their productivity abd higher demand for products arising from higher wages can increase demand for labour

Question 6

Why earnings of occupations change

Change in demand for labour

Answer 6

• Change in demand for product
• Change in labour productivity
• Change in the price of capital

Question 7

Why earnings of occupations change

Change in the supply of labour

Answer 7

• Change in the labour force
• Change in the qualifications or length of training required to do one job
• Change in non wage benefits of a job
• Change in the wage or non wage benefits of **other **jobs

Question 8

Why earnings of occupations change

Changes in the stage of production

Answer 8

• People working in the primary sector are less well paid because they tend to be less skilled
• As an economy develops, the demand for primary sector workers usually declines

Question 9

Why earnings of occupations change

Changes in bargaining power

Answer 9

• A change in unions’ bargaining power or willingness to take industrial action can affect earning

Question 10

Why earnings of occupations change

Changes in government policy

Answer 10

• Pay of public sector workers likely to rise if gov expands public sectors
• Raising minimum wage
• Improved education may increase the demand of skilled workers
• Government policies on immigration (increased supply of labour from looser laws)
• Introductino of anti discrimination laws
• Advances in technology (can reduce demand for workers)

Question 11

Why earnings of occupations change

Changes in public opinion

Answer 11

• How occupations and those who undertake them are viewed can change

Question 12

Why earnings of occupations change

Changes in the earnings of individuals overtime

Answer 12

• Earnings increase as people get older (more skilled, productive, experienced)
• Some workers may switch emploiyers in pursuit of higher pay
• Chance that earnings may fall overtime and some may switch to less demanding work

Question 13

Determinants of elasticity of demand for labour

Answer 13

• Proportion of labour costs in total costs
• Time period
• Ease with which abour can be substituted by capital

Question 14

Determinants of elsaticity of supply for labour

Answer 14

• Qualifications and skill required
• Length of training period
• Level of employment
• Mobility of labour
• Degree of vocation
• Time period (more elastic overtime)

Question 15

Advantages of specialisation

Answer 15

• Lower cost per unit produced
• Output per worker increases because they get good at it
• Does not need to be trained to handle a full range of equipment
• Time saved as workers will not have to move from one job to another

Question 16

Risks of specialisation

Answer 16

• Risk of higher costs
• WOrkers may get bored doing the same task leading them to not take care of work and make more mistakes
• Boredom may result in workers taking more days off due to sickness and staying in jobs for shorter periods of time
• Difficult to for other workers to cover up those absent

Question 17

Specialisation for workers

Answer 17

• Can earn high wages if they become very skilled and their skills are in demand
• Specialising in less demanding jobs can reduce the pressure on workers
• Demand for their services may fall and if they are trained or practised in only one job, they may encounter problems getting another job
• Concentrating on a particular task or job may be boring and may not make full use of a worker’s talents